Alan David Tikal arrested on federal charges

The focus of a 7 On Your Side investigation into mortgage fraud is under a new federal indictment.

Alan David Tikal of Brentwood is accused of masterminding a multi-state fraud that victimized a thousand homeowners out of $3.1 million.

Authorities arrested Tikal on Friday at his home. 7 On Your Side first reported last year that Tikal promised distressed homeowners he could refinance their mortgages. He's accused of taking money up front for their loans and then collecting monthly payments and closing costs. Many of those who helped Tikal recruit new clients were distressed homeowners themselves.

"This thing took off like wildfire. They sold you an opportunity to help other people. They saw the opportunity to make money," said a former Tikal employee client recruiter.

Earlier this year, Tikal served time on a grand jury indictment in Alameda County.